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Ellersick v. Monro Muffler Brake, Inc.

United States District Court, W.D. New York

March 31, 2017

JOHN ELLERSICK, DAVID ELLERSICK, LEWIS C. YOUNGS, JR., RICHARD CURRY, JR., and RICHARD H. TEMPLE, ON BEHALF OF THEMSELVES AND ALL OTHER EMPLOYEES SIMILARLY SITUATED, Plaintiffs,
v.
MONRO MUFFLER BRAKE, INC. and MONRO SERVICE CORPORATION, Defendants.

          DECISION AND ORDER

          HON. FRANK P. GERACI JR. Chief Judge I, United States District Court

         INTRODUCTION

         Plaintiffs, who are all former mechanics and technicians of Monro Muffler Brake, Inc. and/or Monro Service Corporation (collectively “Monro”) bring this collective and class action lawsuit seeking unpaid wages and overtime pay under the Fair Labor Standards Act (“FLSA”) and under New York and Pennsylvania state labor laws.

         There are five motions currently pending before the Court: (1) Defendants' Motion to Decertify the Conditionally Certified Collective Action (ECF No. 175); (2) Defendants' Motion to Deny Class Certification (ECF No. 176); (3) Plaintiffs' Motion for Class Certification (ECF No. 182); (4) Plaintiffs' Motion for Partial Summary Judgment (ECF No. 210); and (5) Defendants' Motion for Partial Summary Judgment (ECF No. 218).

         The Court has received extensive briefing on these motions, and deems oral argument unnecessary. For the following reasons, Defendants' Motions to Decertify and Deny Class Certification (ECF Nos. 175, 176) are GRANTED; Plaintiffs' Motion for Class Certification (ECF No. 182) is DENIED, and the parties' respective partial summary judgment motions (ECF Nos. 210, 218) are both DENIED WITHOUT PREJUDICE.

         BACKGROUND

         This Fair Labor Standards Act (“FLSA”) collective action was conditionally certified as an opt-in class action case by United States Magistrate Judge Marian W. Payson on April 5, 2012. Specifically, Magistrate Judge Payson conditionally certified a class of current and former technicians and Assistant Store Managers (ASM's) from Monro, for the 3 years prior to the March 23, 2012 conditional certification Order, and who worked in Monro's stores. Approximately 8, 277 people were sent notice of this opt-in action, of whom, approximately 1, 125 opted-in to this action.

         In support of the present motions, Defendants have submitted the declaration of Catherine D'Amico, who is the Executive Vice President-Finance, Treasurer and Chief Financial Officer for Monro, and has been with Monro for approximately 20 years. ECF No. 175-2. Both parties rely heavily on Ms. D'Amico's declaration and her deposition testimony, which the Court will use here to summarize the salient background information[1].

         Monro has approximately 539 stores that operate in 15 states. Each of these stores typically have a Store Manager, an Assistant Store Manager, and 3 to 6 Technicians.

         According to Mr. D'Amico, Monro's technicians are compensated primarily by commission, or what Monro calls “incentive.” These commission rates are typically 10-12% of the total invoice for the technicians work for the week.

         In addition, each technician has what Monro calls a “guarantee rate.” Each employee has their own guarantee rate; some fluctuate based on a 12-month rolling period that is based on productivity (essentially calculated by dividing commissions by hours worked), while others have a fixed guarantee rate.

         If a technician's commissions for the week does not exceed the amount of their hours worked multiplied by their guarantee rate, the technician receives what Monro terms a “subsidy” to make up the difference. Let's say for example that a technician earned $330 in commissions in a given week. For that same week, if that technician's guarantee rate is $10 per hour and he or she worked 38 hours, Monro would pay that technician (in addition to their earned $330 in commissions) a subsidy of $50, for a total weekly gross pay of $380.

         According to Ms. D'Amico, Monro's expectation is that technicians will be paid primarily on commission. She states that technicians who receive excessive subsidies are subject to disciplinary action, up to and including termination. To that end, Monro manages against the payments of subsidies. Exactly how much in subsidy payments will be tolerated varies, based on a variety of factors including the individual manager's tolerance level, local market conditions, seasonal fluctuations in store volume, and whether that particular store is open on Sunday, since Monro staffs the store with at least 2 people for safety, but Sunday is typically a low volume sales day. The personnel decisions regarding how much subsidy is tolerated and any resulting disciplinary actions is ultimately made by the field level managers in consultation with Monro's Human Resources division.

         Ms. D'Amico relays that “operationally, Monro treats technicians as ‘hourly' in that their hours are recorded and they are paid overtime. However, technicians are expected to be compensated exclusively (or at least primarily) based on commission/incentive; the guarantee rate is merely a method of setting a floor on technician earnings which is expected to be the exception, not the rule.”

         For those technicians with fluctuating guarantee rates, they are recalculated every month, and the rates are based on that technician's previous 12-month productivity. In addition, all technicians, whether assigned a fluctuating guarantee rate of or non-fluctuating guarantee rate, are also assigned a grade (also known as a level) which has an associated commission percentage rate, as well as minimum and maximum guarantee rates.

         Further, Monro's ASM's are technicians who act as the Store Manager only in the absence of the Store Manager. If the Store Manager and the ASM are working at the same time, the ASM works, and is paid, as a technician. On days when the Store Manager is not working, the ASM acts as the Store Manager, and earns what Monro terms “run shop” pay at an hourly rate, but also works as a technician as needed. The ASM continues to earn commissions (incentive) on work he or she performs under the technician pay plan, but then splits these commissions 50%-50% with the store.

         For a week where someone works as both a technician and an ASM, and the technician commissions do not exceed the guarantee rate multiplied by the hours worked as a technician, the employee receives a subsidy to make up the difference.

         According to Ms. D'Amico, in weeks when technicians and ASM's work more than 40 hours in a week, they are paid overtime.

         As part of the discovery provided in this case, Monro provided payroll data from September 2004 through approximately July ...


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